The Arab League yesterday approved a Qatari proposal to set up a $1bn fund for Arab East Jerusalem, which Palestinians want as the capital of an independent state under any peace deal with Israel.

Arabs say that Israeli settlement-building on land occupied in the 1967 Middle East war, including Arab East Jerusalem, has made a two-state solution backed by the US unfeasible.

HH the Emir Sheikh Hamad bin Khalifa al-Thani said Qatar will contribute $250mn to the fund, which he called for in the opening speech to the 24th Arab Summit in Doha that focused on stalled Israeli-Palestinian peace efforts and the crisis in Syria.

“The summit... calls for setting up a fund to support Jerusalem to the value of $1bn to finance projects and programmes that would maintain the Arab and Islamic character of the city and reinforce the steadfastness of its people,” the draft resolution said.

The Islamic Development Bank, based in Saudi Arabia’s Red Sea city of Jeddah, will manage the fund, it said.

“(Jerusalem) is in serious danger, which requires of us serious action. Palestinian, Arab and Islamic rights in Jerusalem cannot be compromised. Israel must realise this,” HH Sheikh Hamad bin Khalifa said in his address to the opening session.

HH the Emir also proposed holding an Arab mini-summit in Egypt aimed at reconciliation between the Hamas movement and Fatah, which controls the West Bank and is headed by President Mahmoud Abbas.

HH Sheikh Hamad bin Khalifa presided over the inaugural session of the summit held at the Sheraton Doha Hotel.

HE the Prime Minister and Foreign Minister Sheikh Hamad bin Jassim bin Jabor al-Thani, a number of ministers, Arab heads of state and delegates attended the opening session together with the heads of the diplomatic missions accredited to Qatar

In his address, the Emir said that the Palestinian cause was the core Arab issue and the key for peace, security and stability in the Middle East.

“There is no peace without a just, permanent and comprehensive settlement that addresses the full legitimate rights of the Palestinian people; foremost among these is the establishment of its independent state with East Jerusalem as its capital,” said the Emir.

“Israel has to realise that force does not bring security, and that peace alone would achieve security for all, and that its illegal practices or violation of the sanctity of Al Aqsa Mosque, Judaising of East Jerusalem, pursuing settlement policy and detaining Palestinian captives in Israeli prisons, all these practices and policies would only lead to creating tension in the region, increase despair and frustration among the Palestinian people and putting more hurdles on the path of the already stalled peace process,” he said.

“Realising the gravity of continuation of this situation and its repercussions, we propose - for the sake of putting the Palestinian house in order - convening a smaller Arab summit in Cairo at the earliest possible under the chairmanship of the sisterly Arab Republic of Egypt, and the participation of any Arab countries that wish to attend in addition to Fatah and Hamas leaderships,” said the Emir.

The Emir welcomed the participation of the National Coalition of Syrian Revolutionary and Opposition Forces and the provisional Syrian government in the summit.

“No doubt, they deserve this representation thanks to the popular legality they gained internally and the massive support abroad, and also because of their historical role in leading the revolution and preparing for building the new Syria,” he said.

“The development of the serious and tragic situation in sisterly Syria took a catastrophic turn over the past two years and led to shameful tragedies and crimes. Since some time ago remaining tight-lipped on these crimes and the suffering of the Syrian people inside Syria and in refugee camps has become a crime per se.”

He said the Syrian people, “the descendants of a great civilisation, genuine culture and honest Arabism” deserved a free, decent and secure life, … “united by sense of belonging to the homeland without suppression, exclusion or marginalisation”.

He called on the Security Council “to stand up for truth and justice, and respond to the voice of human conscience against injustice and oppression of people, and to issue a resolution for an immediate cessation of bloodshed in Syria and to bring those who are responsible for the crimes committed against its people to the international justice”.

The Emir, chairman of the current Arab summit, declared closed the 24th Arab Summit at the final session held at Sheraton Doha last night.

Addressing the closing session, the Emir noted that the 24th summit was held in “crucial circumstances”, expressing his appreciation of the participation of Arab leaders and their contribution to the success of the gathering and reaching an outcome fulfilling the aspirations of the Arab people.

He expressed the hope for full implementation of the summit’s resolutions. He also praised the Emir of Kuwait’s hosting of the 25th summit in his country. He commended preparations made by the Arab League Secretary General Nabil al-Arabi for the summit.